Good Morning. My name is Ashley and I will be your conference operator today. At this time, I would like to welcome everyone to Goodyear’s second quarter 2009 financial results conference call. (Operator Instructions) I would now like to turn today’s call over to Director of Investor Relations, Patrick Stobb. Sir, you may begin your conference.

Thank you, Ashley and good morning everyone. Welcome to Goodyear’s second quarter conference call. Joining me on the call are Bob Keegan, Chairman and CEO, Darren Wells, Executive Vice President and CFO and Damon Audia, Senior Vice President, Finance and Treasurer. Before we get started, there are a few items I would like to cover. To begin, webcast of this morning’s discussion and supporting slide presentation can be found on our website at investor.goodyear.com. A replay of this call will be accessible this afternoon. Replay instructions were included in the earnings release issued this morning. The last item, we plan to file our 10-Q later today. If I can now direct your attention to Safe Harbor Statement on slide two of the presentation. Our discussion this morning may contain forward-looking statements based on our current expectations and assumptions that are subject to risks and uncertainties that can cause our actual results to differ materially. These risks and uncertainties are outlined in Goodyear’s filings with the SEC and in the news release we issued this morning. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Turning now quickly to agenda. On today’s call, Bob will provide a strategy update and market overview. After Bob’s remarks, Darren will review the financial results and discuss outlook before opening the call to your questions. So, that finishes my remarks. I will now turn the call over to Bob.

Thanks, Pat and good morning everyone and thank you for joining us on the call this morning. There’s little debate as to the severity of the economic and industry downturn we have experienced over the past three quarters. However, despite conditions that have had a significant impact on our performance attributed to weak industry demand and escalating raw material costs, we had what I would call a respectable and encouraging second quarter. We are starting to see some positive signs of economic stabilization and recovery although still fragile at this stage and varied around the globe. Global Tire industry demand remains significantly below levels prior to the recession as most major economies continue to struggle. I will comment on our current perspectives concerning several key drivers of our business. In the US, the key miles driven indicator increased slightly for the second consecutive month in May after a record 16 straight months of decline. The growth was a modest 0.0007% following a 0.006% gain in April. Miles driven for the year are still down 0.008% from a year ago, a total reduction of 10 billion miles. Businesses in the U.S. and Europe have aggressively managed inventories reflecting the drop in both current economic activity and their future expectations. This dramatic inventory adjustment, combined with the economic slow down in autos and construction, has had a severe impact on commercial trucking and therefore, on our truck tire business. This slide has exceeded our low end expectations with the ATA or American Trucking Association index, which measures commercial freight tonnage posting in June a 13.6% drop year-over-year, the largest decline of the current cycle. Cash-for-Clunkers Programs in Europe have stimulated new car sales this year. The U.S. program should begin to stimulate sales during the second half, and I would just remind…

Thanks Bob. I will start this morning with a few summary comments before moving on to address our operating results, the balance sheet and the outlook for the rest of 2009. Despite continued weak industry volumes, which were a lot like we saw in Q1, our second quarter results strengthened compared to last quarter. The improvement in revenue and segment operating income reflected strong price mix performance, driven by the top line initiatives that Bob discussed. As we indicated on last quarter’s call, the increase in raw material costs moderated in Q2 after peaking in Q1. So price mix performance was once again able to more than offset raw material cost increases. As in the past few quarters, we continued to see the double hit to earnings from production cuts, which reflect not only lower sales, but also our aggressive management of inventory levels. In the second quarter, we reduced production by about 10 million units compared with a year ago, consistent with the plans we discussed during our first quarter conference call. Our results also reflected increasing benefits of net cost savings, which are flowing to the bottom line given today’s low cost inflation. This savings also had to overcome increased pension expense of nearly $50 million in North America, the result of portfolio losses in 2008, which impacted cost of goods sold significantly for the first time in Q2 given a one quarter lag in inventory. Our cash actions drove strong cash flow performance in the quarter. The second quarter is normally a period of seasonal cash usage, but we had positive cash flow this quarter, the result of strong working capital management. This cash generation, along with our $1 billion notes offering, has strengthened our solid liquidity position even further. The significant drop in industry volumes when…

(Operator Instructions) Your first question comes from Himanshu Patel – JP Morgan.

I am wondering if you can comment a little bit on the inventory situation. Bob, I think in the last quarterly call, you had mentioned that inventories in most segments were coming inline except in commercial tires. Where would you characterize the situation now and on that same point, is the $4 million unit production cut for the third quarter, does that anticipate any further inventory destocking or is that just effectively moving inline with what you expect sales to do?

Himanshu, first just a point of clarification; you mean inventories out in the market. I think what we are seeing in commercial. I will start with North America, is those inventories are starting to work their way down, but we still see a challenge here over the balance of the year, but they’re working their way down, certainly and we can see that in the variety of different customers that we monitor. In Europe, the decline in commercial has been somewhat more dramatic, but again, now starting to work itself down. You can see that by quarter-to-quarter improvements overall and what we are seeing in commercial at the replacement level and the OE business has a long way to go in both Europe and North America to work their inventories down on both trucks and subsequently of tires. Darren, you might comment on the impact there on production schedules.

Himanshu, the way to think about it is that we are going to continue to work on inventories. During the first half we benefited from strong inventory controls, but also the decline in raw material costs. Raw material costs have started to go back up. So obviously, that has got an impact on inventories, but as you think about our production, the production cuts that we are taking have been and will continue to be a combination of factors, one being lower sales, but the other being our desire to continue to drive down the number of units inventory.

Okay and then Darren, on slide 14, the global EBIT walk, when does that general cost inflation line item flip to be a favorable year-over-year? Could that happen in Q3?

Himanshu, the cost inflation has come down dramatically, but you have to keep in mind that the cost inflation is not just a reflection of cost in the U.S., but it includes inflation factors in other parts of the world. So, while you have seen, producer price industries and other indicators in the U.S. actually turn negative, in other parts of the world, that’s not true. So I think we will be looking for inflation to stay fairly modest. I am not sure we have a prediction as to when or whether it might actually flip around.

Just in perspective, I think, Darren, we can say that the first half general inflation was about 1.5% increase and that trailed off a little bit in the second quarter as compared to the first quarter. So, we would anticipate and hope that we are dealing with pretty manageable numbers there. Himanshu Pattel – JP Morgan: Then last question for me, Bob any comments on the ITC ruling?

Really no. Obviously, controversial area. Obviously, it has not been signed by President Obama at this point. You could presume it will be or won’t be, but I can guarantee you there’s tremendous activity in Asia right now, in terms of shipping product into the North American markets as you would suspect. Himanshu Pattel – JP Morgan: I guess my question is, I mean if some sort of tariff does get imposed. How do you view that affecting your business? Is it as simple as saying that should help your North American business or would there be some offsets where maybe a lot of those tires from China end up in other geographies and maybe that hurts Europe or Latin America?

I think like any of these things, it’s the reason. Darren mentioned in his comments that we’re struggling like everyone in Latin America with some of the protectionist activities. Obviously, what’s going to happen is play out on a global scale and the Chinese are going to produce the tires and those tires are going to find their way in the markets. Possibly they’re also going to shift manufacturing location for tires going around the world, in other words, tires not going from China to the U.S., but other places in China. Chinese really own the tire plants producing tires in other locations, Indonesia, Malaysia might come to mind, coming here into the US. So, it is never as easy as people that look at these things at a very high level assume. There’s going be tremendous change in product flows if this becomes reality.

First of all, I was just hoping you might have the raw material costs on just an absolute dollar basis. What was your raw material cost in the quarter?

Rod, the break down of raw material costs for us, historically what you have seen is it’s been about 40% of our cost of goods sold. That’s what we saw in 2008. I think what you’d see in year is that percentage has come down some, as we have gone through this decline in raw material costs. It’s a modest decline. So, I think your starting point is going to be where we’ve been in the past, which is 40%. It is probably coming back down more toward where we would have been prior to 2008, which is closer to 35%. So, you are going to be somewhere in between those two.

So, 35% to 40%, something like that.

Well, as Darren mentioned with a lot of volatility here. If you look at individual components, significant components like for us butadiene, we saw huge declines, I think 50% over a six month period and then in the last three or four months an 50% and 80% increase. So, obviously, that’s affecting the percent of the total, but collectively Darren, I think 35% to 40% is a good estimate as we would have.

It just looks like; your non-raw material costs of goods sold is down pretty dramatically on a year-over-year basis. Just trying to back into numbers here, could you tell us what the FX impact was on the cost of goods sold line?

You are going to see there an impact that’s going to be on cost of goods sold, it’s going to be similar to the sales line. So it’s not going to differ that much. We saw our sales, the impact of foreign exchange on sales of about $369 million.

7% plus.

What you’ll see is cost of goods sold affected by foreign exchange by a little over $300 million.

Any color on the outlook for SG&A in the back half of this year?

I think the color would be, in this environment, we are going to continue to monitor everything we spend even more closely than we’ve done historically. We’ve obviously taken out activities that we though we’re not value creating. We’ve taken out a tough stand a bit on advertising generally, except for supporting new products. We’ve supported new products as fully as we think we should around the globe, and we’ll continue to do that. So I think from that standpoint, a lot of change in the first half that will probably ameliorate a little bit as we go into the second half.

I guess three other points, was hoping you could provide some color on what your primary objectives were out of these labor negotiations. How your pension performance has done year-to-date? Just lastly, just to clarify, did you say there was a $230 million cash benefit from what’s happening in Venezuela or a detriment to you in terms of cash flow?

Let’s take that one first, and then we’ll back up.

Rod, the comment was that the amount of cash in Venezuela has increased. As we’ve continued to produce tires there, but we haven’t been able to pay suppliers. So the cash balance in Venezuela has gotten up to $290 million. So that was the point on Venezuela. It wasn’t a point on cash flow per say, it was a point on where the cash balance has gotten to at this point.

Then we will backup, Rod, on your last three points. On the labor negotiations, we’ll just say that overall, our policy is not to discuss these negotiations as they’re on going. I think that’s good solid policy. We’re not going to deviate from that. Obviously, what we’re doing here is we’re addressing other issues to create a more competitive manufacturing and supply network for us in North America. That’s as much detail as we’re going to convey at this point. Then the next point was pension?

Yes.

Rod, second quarter pension performance was quite positive. Through June, we were at positive 6.5% on our U.S. plants.

Your next question comes from John Murphy - Bank of America/Merrill Lynch. John Murphy - Bank of America/Merrill Lynch: In the quarter, price mix of positive 127 was better than we were looking for, and it looks like it is approaching $400 million positive for the first half of the year given what went on in the first quarter. As we look at what’s going on in the second half this year and your push into this mid tier part of the market. Do you expect to continue to see that to be a positive in the second half of the year of the same magnitude, or will that diminish overtime?

I’ll make an overall comment here John. That generally if you look at, what we’ve done over the past 5.5 years. So if you track from ‘03 through ‘08, and then into ‘09. We have delivered positive price mix. We intend to do that, we’ve got the product lines to do that. Frankly, we think we have the pricing strategies and the pricing courage to be able to make that happen. That’s a bit of what you saw certainly during the first half. As we get more competitive, we’re going to continue to deliver that kind of price mix led by, or maybe better said, anchored in our new product capability and innovative capability. As I said, it creates a halo effect throughout our entire product line. So that from a high level is what I would say there. Darren, any comments in terms of price mix with any more specificity in the second half?

Yes, I think a couple of things you will want to think about John, as you consider that. One is that the expectation of the U.S. OE business coming back, which generally is, if it comes back more quickly that’s a negative mix impact for us, because we don’t have the margin on those units that we have on replacement units. The other one to continue to watch out for is just how consumer behaves versus commercial. So particularly in our international business units, the commercial business staying so weak as it has in Europe is a negative mix factor for us. So you have to keep those two things in mind as we look at the second half. John Murphy - Bank of America/Merrill Lynch: Darren, you sort of led me into my second question. As we look at the potential for a big up tick in production volumes on the OE side, particularly in North America, we’re expecting better than 30% in the fourth quarter this year. I know you guys don’t make great margins on those OE tires, but as those tires theoretically ramp up, will those create a reversal of the unabsorbed overhead that we’re seeing in the first half this year? I’m not looking for guidance, but I’m trying to understand. Even though the margins there might not be that great, the volume should help the unabsorbed overhead, right?

John, the response is yes, it will help. We’ll have lower unabsorbed overhead as those markets start to come back a bit. John Murphy - Bank of America/Merrill Lynch: Lastly, working capital was a positive in the first half of this year, which is a little bit unusual and obviously had to do with the inventory management, which is great. Should we expect to see the second half to be positive like it is typically sort of on a seasonal basis, or have you gotten a lot of those benefit in the first half this year?

The seasonal trend, as you pointed out, is not the same seasonal trend that we’ve seen historically. So we’ve been able to contain our working capital levels and keep inventories in line, keep receivables in line. In addition to taking advantage of the fact that raw material costs have come down and their value in inventory is lower. The challenge for the second half is to manage the inventory receivable levels as we look for markets to potentially recover, whether it is second half of the year or beyond that, that’s going to be our challenge. As we’re managing them in a very weak environment, we have to also manage working capital as the markets recover. So I think it’s fair to say that, if the working capital hasn’t gone up as much, there’s less opportunity from a seasonal perspective, but I still see opportunity as we look at what we can do in driving down the number of units in inventory. Certainly, we’re not all the way there on the commercial truck business. We still see inventory needing to comedown to address the market environment we’ve got today, and we’ll continue to focus on what our supply chain can do to allow us to operate with lower units in our consumer inventory.

We’re not officially going to change our inventory target. I think that’s important to say, but yes, you can accuse us of being conservative on that target at $500 million. John Murphy - Bank of America/Merrill Lynch: Just lastly, real quick on the USW contract, it sounds like you’ve made a lot of progress on operating agreements, headcount reduction, getting Union City unprotected. What’s left on the table? It seems like to me, the only other major issue really out there is potentially retiree benefits or pension. Is that something that’s being negotiated right now, or are there other big items that are out there that I am missing?

John, everyone on the call is going to look at me at this point, because I’m going to give you the response you don’t want to hear, but again, I’m not willing to say anything with anymore granularity than I said. Because I think you’ll understand, we’re in the middle of those negotiations. I will simply say those things that can improve our competitiveness are on the table and we’re having good, productive discussions and the extension of the contracts to August 15, is a good solid move that I think just portrays, we’re having good conversations, but I’m not willing provide any more granularity at this point.

Your next question comes from Saul Ludwig - KeyBanc.

I appreciate the comments that you made about mix and its impact on price mix as we look forward, I think those are very relevant. If we had a constant mix, how was your average price in the second quarter compared with the first quarter? Has there been any degradation in pricing, and do you expect any degradation in the third quarter from the second quarter levels again, on a constant mix basis?

Saul, we don’t break out, traditionally, price and mix, but I think we can say that in this environment it varies around the world. If one were to just look at price in the price mix, price is a contributor to the price mix positives that we’re seeing. Because the question maybe or I can interpret it as is this all mix? It’s a combination of price and mix. They’re both significant contributors on a year-over-year basis. If you look at Q1 to Q2…

Any degradation in price?

We’ll keep price and mix together, Saul. I understand your question it is very hard for us to break those apart in a meaningful way. I think as we moved into Q2, as we’ve seen most of the degradation in volume in North America was OE versus replacement, that the fact that gave us a very high mix of replacement that is a beneficial thing for us. As we look in Europe, certainly they’re hurt by the fact that commercial business is down very severely. In fact, the OE business held up better, so that was working against them in Europe and that’s why you saw from us that in our European business we had our revenue per tire year-over-year down about 4%, but in fact, if we had kept the mix constant, it would have been up about 4%. So, we saw a huge impact there from the mix of business which is partly commercial truck, also includes agriculture OTR and some other non-consumer tires. So, we’ve got some major drivers there. So, I think that’s where we will leave the comments for now.

The $4 million production cuts in the third quarter, will they will if this same proportion geographically as what we saw in the second quarter?

I think the production cuts are going to be reflective of where we see the markets. So, as you might expect, we are going to have production cuts that are going to match up with where the volume is needed. So, I think you can make some judgments about where we see the industry, where others see the industry and you can assume we are going to follow what’s going on in the market place and work back through our production schedule.

For both consumer and commercial.

Finally, the performance you had in Asia was outstanding, congratulations on that in particular. We’ve now seen, and you commented that part of that had to do with you saw raw material cost cuts earlier there than elsewhere in the world. Now we have seen this, a little up tick in natural rubber prices and as you talked about already Bob, can this level of earnings in Asia be sustained or is this a second quarter little [fluke], if you will, on the upside?

Well, I would start the response, Saul, by saying look; we’ve had continually improving and outstanding year-on-year performance in Asia Pacific for sometime. We are doing this today with frankly, weak markets in Australia and New Zealand. They look more like the other western markets of Europe and North America. So they’re going to get a boost when those markets comeback, which they inevitably will, too. So, I see this natural so much as a raw materials question but more a market capability question, and they have done a very nice job in Asia. You can see it by remember, we are restructured our entire manufacturing network in Asia with I lot of activity over this past three years. We have got our cost structure down, and we will continue driving that down. So I think they have room to play, both on cost and certainly from a market standpoint. Because although China and India are doing better, we still in Asia are down in volume Asia Pacific totally are down in volume year-over-year. So we’ve got a lot of room to continue to move there from an overall standpoint.

Your next question comes from Itay Michaeli - Citi. Itay Michaeli – Citi: Great. Thank you. I just have a couple of follow up cash flow questions. First on pension, I know you mentioned your performance in the quarter, but do you have a better sense of what the minimum contributions we should be thinking about here over the next couple of years? Does it have to ramp up back to $600 million, $700 million that we saw earlier in the decade, or any sense there?

For 2009, we’ve kept the guidance at $325 million to $375 million and as we look forward into 2010, what we have said is we expect it to be up approximately $200 million from that number in 2009. Now, what we do know is there was some relief from the IRS on the discount rate selection for at year end 2008. That would positively impact the 2010 contributions or reduce them, but given all of the other variables, that can have change throughout 2009. We haven’t changed the guidance, but I guess at this point, I will tell you that $200 million is probably the high end of incremental contributions. Itay Michaeli – Citi: Then just on the cash flow for the remainder of the year, could you help us out with what you are thinking the cadence might look like? Does Q4 still look better than Q3, or is it perhaps more smooth given the puts and takes around inventory?

Yes, I think that you’re right to think about the seasonality potentially being different this year, I think it’s a fair point. Because normally we would see very significant outflows during the first three quarters and I think inflow in the fourth quarter, some of it driven by lower inventory, but a lot of it driven by lower accounts receivable based on seasonal sales pattern. I think we are going to continue to work down inventory, we are going to continue to focus on that and try to run our business with lower units of inventory. We have gotten a lot of benefit from lower raw material costs in the first half so in some ways, where raw material prices go, we will have some influence over where inventory for raw materials is the rest of the year. I think we would still look for some level of seasonality in terms of receivable balance and inventory for the fourth quarter. So, it is more muted than it would have been in a year when there has been a bigger build in the middle of the year, but I think we’ll still see some seasonal impact there. Itay Michaeli – Citi: Great, and then just lastly, a bigger picture question on CapEx. It looks like you are able to preserve margin here on $700 million to $800 million of CapEx, but if you think about the next couple of years, do you think you can sustain that level and still return to say, mixed mid single-digit operating margins, or do we probably have to trend back up to north of $1 billion?

I won’t be precise here, but certainly, the $700 million to $800 million, we don’t see that as a sustainable level We are able to do that because frankly, demand is down, and so we don’t have the same requirement for modernization and move the high value added tires at the same pace that we had before, but that trend is clearly upward, so it is going to put pressure on our CapEx expenditures overtime.

Your next question comes from Kirk Ludtke - CRT Capital Group.

With respect to volume, I wasn’t quite sure what the guidance was for the third quarter with respect to in Asia in aggregate.

I mean for the second quarter, what we saw in Asia, as Bob mentioned was we have some strength returning for China and India, but we have very weak markets in Australia and New Zealand. Then we’ve got the rest of traditional Asia somewhere in between the two. As we look forward, we’re looking for the region in aggregate to see growth. I think the color behind it is we see a lot of that growth being driven by the strength in China and India. The recovery in Australia and New Zealand I think we’d expect to be slower, so we would still expect those markets to be fairly weak, but take a market in aggregate, our indication was we see Asia Pacific strengthening.

So third quarter versus second quarter, you think it is positive.

Yes, I think we are looking for Asia Pacific to return to year-over-year growth in industry volumes.

Then with respect to materials, the guidance is pretty clear for the third quarter, down 18%. Fourth quarter also down year-over-year, but you’re not sure what the percentage change is going to be in the fourth quarter?

There are clearly still some variables out there that could influence the fourth quarter. The view that I would offer you is that based on everything we know today, the percentage decline in the fourth quarter would be a bigger percentage decline than Q3.

Then with respect to pension, of the pension of 425 of pension expense for the full year, how much did you actually expense in the first half?

Pension expense for the first half?

It’s about half of that.

So it is half, even though you only recognized the incremental pension expense in the second quarter?

Yes.

Same thing for funding, did you fund about half of the 325 to 375?

Yes Kirk, I think year-to-date pension contributions were about $170 million, so about half.

Then Bob, you mentioned that there’s an increase in Asian tire imports, I guess in anticipation of the President potentially signing this legislation. Do you think that impacts pricing in the second half, or is that in segments that you don’t compete in anymore?

I really can’t, I’d be speculating about that. The reality is we know that there’s a lot of product coming in right now, which is totally natural given the expectation. In terms of its impact on pricing, I’m not going to speculate on that.

Lastly, with respect to FX, what was the impact on, I know it was a negative for sales, but what was the impact at the operating income line?

Yes, the impact at the operating line was not as significant for us. The reason, is if you look for instance in Europe, where some of the most significant impact is on the top line, because the operation is on an EBIT level pretty close to breakeven, it’s not seeing a big impact from currency. Not a big factor.

Alright, thanks, Kirk. Thanks for everyone for joining us today. We appreciate that and this is Pat. If you have any follow-up questions, please feel free to give me a call. Thank you. Ashley, if you can close the call.

Thanks everyone.

This concludes today’s Goodyear’s second quarter 2009 financial results conference call. You may now disconnect.